DES MOINES, Iowa –State Treasurer Michael L. Fitzgerald announced today a bold new initiative to combat the looming retirement crisis in America. “All Iowans, regardless of industry or education, deserve the chance to save for a prosperous future,” Fitzgerald said. “My office is introducing a new plan that offers Iowa’s small business workers the ability to easily and conveniently save for their retirement needs.”
Under the proposed legislation, Retirement Savings Iowa would be offered to private sector workers through their employers. Created as a public trust managed by the state, the state treasurer’s office would serve as its trustee. “The AARP Public Policy Institute found that 42% of Iowa’s private sector employees do not have access to an employer-sponsored retirement savings plan,” Fitzgerald explained. “This program will remove many of the complexities and costs small business owners face when setting up and maintaining retirement plans, making it easier for their workers to access a retirement account.”
Treasurer Fitzgerald was joined by Senator Janet Petersen, D-Des Moines, in announcing the plan. “This legislation will help more Iowans in small businesses save for retirement, many of whom are women,” Petersen added. “We have had great success with our College Savings Iowa program, created and maintained by the treasurer’s office. I know we will have the same success with Retirement Savings Iowa.”
Studies have repeatedly shown that Americans are not saving enough for retirement. Saving becomes even more difficult for small business workers because many small businesses do not have the resources necessary to offer an employer-sponsored plan. In response, many states are considering legislation that will confront this problem head-on.
“We have been studying the best way for Iowa to approach our retirement savings plan,” Treasurer Fitzgerald explained. In a changing environment, where federal regulations are still being finalized, the treasurer is advocating four key features: voluntary enrollment, automatic payroll deduction, portability and tax advantages.
“Iowa has long been a leader in enacting policies that ensure our citizens live fulfilled and equitable lives,” Fitzgerald said. “Our office has been at the forefront of saving for higher education, and we are proud to continue this tradition by introducing legislation that offers all small businesses in Iowa the opportunity to provide a state-administered retirement plan to their employees.”